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MAS introduces initiatives to make prospectuses more reader friendly for retail investors

The Monetary Authority of Singapore (the “MAS”) is carrying out the following initiatives to improve the readability of prospectuses and facilitate investors’ understanding of key information disclosed in prospectuses:

Public consultation on “Guidelines on Good Drafting Practices for Prospectuses”: Between 5 February 2015 and 13 March 2015, the MAS is conducting a public consultation on draft Guidelines to assist issuers and their professional advisers in presenting the information in prospectuses in plain English and in a clear, comprehensive and well-organised manner.

New “Guidelines on the Product Highlights Sheet for Offers of Debt Securities, Hybrid Instruments and Equity Securities”: On 5 February 2015, the MAS issued new Guidelines to assist issuers and their professional advisers in preparing a Product Highlights Sheet which must be furnished to the investors for an offer of:

Debt Securities: Plain vanilla debentures where the offer is made in or accompanied by a prospectus or an offer information statement (the “OIS”);

Hybrid Instruments: Preference shares, perpetual securities or convertible bonds where the offer is made in or accompanied by a prospectus or an OIS; and

Equity Securities: Ordinary shares and units in a real estate investment trust or a business trust where the offer is made in or accompanied by a prospectus.

The new Guidelines will apply to offers of Debt Securities, Hybrid Instruments and Equity Securities for which prospectuses or OIS (where applicable) are submitted or lodged with the MAS on or after 1 July 2015.

Proposals to allow incorporation of information into the prospectus by reference: The MAS will allow information to be incorporated into a prospectus by reference, subject to certain prescribed conditions and safeguards. The MAS will consult on the legislative amendments to implement these proposals.

These initiatives follow a consultation paper issued by the MAS in October 2013 which contained proposals relating to the Guidelines on Product Highlights Sheet for Offers of Debt Securities, Hybrid Instruments and Equity Securities and incorporation of information by reference into a prospectus.

Reference materials

The following materials relating to the above developments are available on the MAS website www.mas.gov.sg:

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